Oct. 3 (Bloomberg) -- Cypriot Finance Minister Vassos Shiarly said the country may receive a first instalment of international financial aid at the end of December.
The Cabinet meets later today to discuss the 2013 budget, which it intends to submit to parliament on Oct. 20, Shiarly told reporters today in the capital, Nicosia. The budget will include austerity measures to be proposed to the so-called troika that oversees euro-area bailouts, he said. The troika comprises officials from the European Commission, European Central Bank and International Monetary Fund.
“The timeframe is very tight,” Shiarly said. “We’re doing whatever we can.” After an agreement is reached with the troika, Cyprus’s bailout plan must be approved by euro-area finance ministers. If this happens by mid-November, funds could be disbursed as early as the end of December, he said.
The Cypriot government, shut out of markets since May 2011, may struggle to pay its bills in December if the bailout is delayed.
Cyprus, which had 492.4 million euros ($637 million) in the bank at the end of August, faces 751 million euros of maturing debt through the end of November, according to the Finance Ministry. The government also has monthly outlays for salaries, subsidies and social programs, with a larger year-end wage payment due in December.
Cyprus on June 25 became the fifth country in the euro area to seek external aid. Euro-area finance ministers agreed to begin talks two days later. No amount was specified for the rescue, which will encompass the public sector as well as banks. Cyprus also sought assistance from Russia and the IMF.
The Mediterranean island nation finds itself in a “very unpleasant situation,” with an initial target for reaching a deal with the troika by the end of September having passed, said Nicholas Papadopoulos, head of the Committee on Financial and Budgetary Affairs in the Cypriot House of Representatives.
“As a state, as a society, we have to act lightning fast to avoid the risk of a payment halt in December,” said Papadopoulos, a lawmaker from the opposition DIKO party.
Shiarly said today that no date had been set for reopening negotiations with the troika.
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